When Brett Thomas, cofounder and managing partner of CAVU Ventures, left hedge fund Scout Capital to back consumer packaged goods brands in 2009, he knew he had to find a way to quickly stand out in a space crowded by investors with greater industry experience and insider connections.
“Growing up, I used to spend hours walking the aisles at Kmart and Target looking at packaging and experimenting with new products,” says Thomas. “I loved trying to understand what makes a brand work and what doesn’t.”
After months spent meeting founders and hearing pitches, inspiration struck. Most of the food and beverage startups he’d come across were still in the nascent stages of development, stymied by limited resources and funding. Access to mainstream marketing channels could be a game-changer, he thought. At the time, his father-in-law, Richard Schaps, was the CEO of Van Wagner Media, one of the largest private billboard companies in the U.S. Thomas knew a certain percentage of his billboard inventory would go unused each month, and in that, he saw an opportunity for a trade. During his next pitch meeting with San Diego, California-based juice company Suja, he proposed that he take an equity stake in exchange for billboards across New York City ahead of its East Coast Whole Foods launch. It worked.
In addition to walking away with a stake in the company, Thomas says, “we were able to help smaller companies grow faster than they would normally be able to at that stage—the idea was to help accelerate their growth.”
Putting His Money Where His Mouth Is
He used this same play, offering proprietary media deals in exchange for a seat at the table, to get into many of the hottest deals of the 2010s, namely, Lyft, Bai, and Deep Eddy Vodka. As these brands gained recognition from consumers, Thomas caught the attention of industry veteran Rohan Oza, the former CMO of Glaceau, the parent company of Vitaminwater and Smartwater, two brands he built before their 2007 sale to Coke for $4.1 billion. They met while co-investing in Bai, and realizing their unique value-add wasn’t easily replicated, joined forces to cofound CAVU Venture Partners. In January 2016, they launched their first fund to “democratize healthy living” for the masses with $156 million raised in just under six months.
“When Brett approached me five years ago about starting a new kind of venture fund, it didn’t take me very long to say yes,” says Oza.
Fast forward five years and CAVU has moved beyond billboards, launching an in-house creative agency, Uncommon, to help portfolio companies with branding, advertising and a celebrity-packed roster of brand partnerships with the likes of Jennifer Aniston, Justin Timberlake, Beyonce and Olivia Munn. Its 10 exits include Beyond Meat, one of the best-performing IPOs of 2019; Hims & Hers, which recently went public via SPAC; Vital Proteins, a majority stake of which was acquired by Nestle Health Sciences for an undisclosed amount last summer; Bai, which sold to Dr. Pepper Snapple for $1.7 billion in November 2016; and ONE Brands, which sold to Hershey for $397 million in August of 2019. CAVU is also on its third $250 million fund.
Part of CAVU’s secret to success has been Thomas’ ability to deftly move into deals that are aligned with changing consumer trends, like the opportunity to back Beyond Meat, which took just one week to execute. Current portfolio companies have positioned the firm to profit during the pandemic, such as mission-driven online marketplace Thrive Market. As online grocery purchases soared to 10% of the overall $1 trillion industry, it tripled its share since the end of 2019. Other bets have included organic children’s food company Once Upon A Farm, cofounded by actress Jennifer Garner and John Foraker, who led Annie’s during its IPO. Says Garner, “Brett’s approach—strategic vision, experience vs. learnings, and (always) nailing the specifics—lines up perfectly with Once Upon a Farm’s brand values on everything from the board room to our latest rebrand.”
Spinning His Vision From Store Shelves Into The Public Markets
It’s this forward-thinking that has opened CAVU—which, unlike most venture firms, is stage agnostic—to a wide range of investment and exit types, including selling to strategic partners and private-equity firms, and even going public itself.
The rationale, as Thomas explains it, is pretty simple. “We didn’t want to pigeonhole ourselves to have a check-size minimum or threshold on revenue—we are finding innovative brands we want to get behind faster and faster every day,” he says.
And as Covid-19 initiated seismic shifts in the $4.5 trillion global wellness economy, CAVU, led by Thomas’ investment expertise, sought to capitalize on ripe buying opportunities, including Wall Street’s SPAC boom in December with the $225 million IPO of the HumanCo Acquisition Company. It will have two years to source the right ESG-focused, mission-oriented consumer brands to invest in across categories like food and beverage, fitness, personal care and wellness.
Industry veterans like Seth Rodsky, cofounder and managing partner of Strand Equity Partners, see the wisdom in the approach. “He always seems to have his finger on the pulse of the latest consumer trends,” says Rodsky. “I’m not surprised at all to see that unique ability to spot these trends translate to continued success at CAVU.”
Adds cofounder and partner Oza, “It’s that same vision and [Thomas’] unrelenting talent for hunting and winning the best deals that continue to help set us apart from the rest.”